Martin Marietta reaches milestones in second quarter 2018

Nye

Aggregate product revenues increased 15.1 percent in the second quarter at Martin Marietta, reflecting volume growth of 11.3 percent and pricing growth of 3.5 percent.

Martin Marietta achieved a number of high marks in the quarter, including record revenues, profits and diluted earnings per share. In addition, acquired operations contributed to 13 percent growth in Martin Marietta’s total revenues.

“Our record-setting second-quarter results, which were driven by increased shipments, pricing improvements and growth initiatives, extend Martin Marietta’s lengthy track record of operational excellence, disciplined execution of our strategic plan and shareholder value creation,” says Ward Nye, chairman, president and CEO of Martin Marietta.

Underlying product demand and customer backlogs remain strong across Martin Marietta’s markets, Nye adds, with notable growth in Texas, North Carolina, Georgia and Iowa.

“In addition, our cement operations benefited from the combination of strong demand and a tight supply environment, resulting in double-digit volume growth and a 680-basis-point improvement in product gross margin for the quarter,” he says.

Aggregate shipments to Martin Marietta’s three primary end-use markets increased during the second quarter, demonstrating the breadth of the overall construction recovery. Still, the limited availability of transportation and tight contractor labor markets pose challenges for more efficient throughput, the company says.

Specifically, suboptimal railroad performance, limited truck availability and contractor capacity limitations, including their notable employee shortages, muted the company’s overall second-quarter volume growth. But as capital and increased wages flow into the construction sector, the company expects these temporary bottlenecks to abate.

For the second quarter, Nye was also pleased with the performance of the newly acquired Bluegrass Materials operations, which contributed $42 million in product revenues at anticipated margins comparable to Martin Marietta’s Mid-Atlantic and Southeast operations.

“This strategic acquisition is accretive to our shareholders and positions us to meaningfully enhance future performance as the eastern United States recovers from below mid-cycle aggregates demand,” Nye says. “We are also on track to achieve our stated synergies.